Fixed Income Chart Of The Day: Japanese demand returns with 5% Treasury bond yield

Research evidence excerpt

Fixed Income Chart Of The Day: Japanese demand returns with 5% Treasury bond yield

Deutsche Bank

Research

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Fixed Income Chart Of The Day 15 May 2026

Japanese demand returns with 5% Treasury

Steven Zeng, CFA bond yield

Strategist

+1-212-250-9373

The latest weekly MOF data out of Japan showed some interesting

developments. In the final week of April and the first week of May, Japanese Matthew Raskin

investors were significant buyers of foreign bonds while selling foreign equities. Strategist

+1-212-250-1741 This sharply contrasts their activities between February and late April, when they

were selling bonds and buying equities. The magnitude of the weekly flows since Andrew Fu

February has been large also relative to recent history. Strategist

+1-212-250-1743

The data primarily captures private sector activity. The bulk of the flows likely

come from banks, although lifers, pensions (including GPIF), and trust accounts Francis Yared

are represented as well. In a separate MOF data release, net selling of foreign Strategist

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bonds in February and March was largely tied to banks and some to lifers.

Ioannis Sokos Japanese banks generally do not currency hedge. One interpretation of their

reversal in foreign bond flows is that they sold into the rally in February and re- +44-20-754-75680

entered at higher yields over the past two weeks. Notably, 30yr Treasury yields

reached 5% in late April and have hovered around that level since. At the same Soniya Sadeesh

time, US equities look potentially vulnerable given the narrow breadth of the rally Strategist

+44-20-754-73091

and the ongoing Middle East conflict, which created an opportunity to take profit

after their recent run-up. Markus Heider

Macro Strategist